Barclays Investment Banking Pitch Book
Preliminary Has-Gets Analysis
KMP Status Quo (Value)
Expected Distribution
Assumed Yield
Implied Unit Price
KMP Pro Forma (Value)
KMP Public Units Outstanding
KMI Share Issued
Adjusted Exchange Rabo
KMI Pro Forma Dividend
Assumed Pro Forma KMI Yield
Implied Value of KMI Stock
Cash Portion Received
Total Value to KMP Unitholders
Estimated Unitholder Taxes
Total Value to KMP Unitholders (Afler-Taxes)
Implied Value Uplit (Pre-tax)
Implied % Uplift (Pre-tax)
Implied Value Upit (After-tax)
Implied % Uplit (After-tax)
Distribution Comparison
KMP Status Quo Distribution
%Equity Funded
Adjusted KMP Distribution
Pro Forma Dividend to KMP Unitholders
Accretion/(Dilution)-$
Accretion/(Dilution) -%
KMP
2015
311.2
676.1
2.1724
2016
$22.87
27%
$10.72
13%
$6.18 $6.46 $6.96 $7.00
6.91% 6.91% 6.91%
$84.41 $89.48 $93.53 $100.77 $102.58
$5.83
6.91% 6.91%
$5.83
88%
$5.13
2017
311.2
$2.00
311.2 311.2 311.2
6761
676.1 676.1 676.1
2.1724 2.1724 2.1724 2.1724
$2.20 $2.42 $2.66 $2.93
4.50%
4.50% 4.50%
4.50%
$96.56 $106.20 $116.82 $128.51 $141.36
$10.73 $10.73 $10.73 $10.73 $10.73
$107 28
$116.93 $127.55 $139.24 $152.09
(12.15) (12.15) (12.15) (12.15) (12.15)
$95.13 $104.78 $115.40 $127.09 $139.94
$27.46 $34.02
31%
36%
$15.31 $21.87
23%
$6.18
$6.46
2018
85%
$5.43 $5.68
$4.34 $4.78 $5.26
($0.78) ($0.65) ($0.42)
(15.2%) (12.0%)
2019
$38.47 $49.51
38%
48%
$26.32 $37.36
20%
30%
$6.12
$7.09
88%
$6.23
$5.78 $6.36
($0.34) $0.13
(5.5%) 21%
EPB Status Quo (Value)
Expected Distribution
7
Assumed Yield
Implied Unit Price
EPB Pro Forma (Value)
EPB Public Units Outstanding
KMI Share issued
Adjusted Exchange Ratio
KMI Pro Forma Dividend
Assumed Pro Forma KMI Yield
Implied Value of KMI Stock
Cash Portion Received
Total Value to EPB Unitholders
Estimated Unitholder Taxes
Total Value to EPB Unitholders (After-Taxes)
Implied Value Uplit (Pre-tax)
Implied% Upit (Pro-tax)
Implied Value Uplift (After-tax)
Impled % Upin (After-tax)
Distribution Comparison
EPB Status Quo Distribution
%Equity Funded
Adjusted EPB Distribution
Pro Forma Dividend to EPB Unitholders
Accretion/(Dilution)-$
Accretion/(Dilution) -%
EPB
2015
$2.60
7.27 %
$35.74
$11.72
33%
$8.72
24%
2016
$2.60
88%
$2.29
Confidential
2017
$2.60 $2.73 $2.78
7.27% 7.27% 7.27%
$35.74
$37.53 $38.21
$2.60
139.2
133.8
139.2 139.2 139.2 139.2
133.8 133.8 133.8 133.8
0.9610 0.9610 0.9610 0.9610 0.9610
$2.00
$2.20
$2.42
$2.66 $2.93
4.50%
4.50% 4.50% 4.50% 4.50%
$42.71 $46.96 $51.68 $56.85 $62.53
$4.75 $4.75 $4.75 $4.75 $4.75
$47.46 $51.73 $56.43 $61.60 $67 28
(3.00) (3.00) (3.00) (3.00)
$44.46 $48.73 $53.43 $58.60
(3.00)
$64.28
$2.29
2018
$15.99 $18.90 $23.38
45%
61%
$12.99 $15.90 $20.35
30%
53%
$2.73
88%
$2.40
$2.78
88%
$2.44
2019
$1.92
$2.11
$2.56
($0.36) ($0.17)
$2.33
(50.07) $0.11
(15.9%) (7.5%) (3.1%) 4.7%
$2.87
7.27%
$39.52
$27.76
70%
$24.76
63%
$2.87
88%
$2.53
$2.81
$0.29
11.3%
Source: Per management
1. Calculated as 2014 distribution guidance of $5 58 for KMP/52 60 for EPB divided by current unit prices of $80.79 for KMP/S35.74 for EPB.
2. Calculated by dividing the number of KMI shares issued to KMP unit holders by the number of KMP units outstanding
3. Approximate calculation for an average unit holder. Actual gain could be more or less. Assumes passive losses have not been utilized and can be utilized on the sale to offset ordinary
income Assumes individual tax rate of 35% for ordinary income and 22% for capital gains for illustrative purposes. If the maximum federal rates of 40.5% for ordinary income, and 23.8%
for capital gains are used, faxes would be $13.55 and $3. 37 for KMP and EPB, respectively.
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